Posted: 10/4/2012 4:51:04 AM EDT
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I don't know, I think I understand the financial peril America faces. I know it's going to get bad regardless of who wins and stay bad for several years but has a chance to get better with the right guidance.
However, when I hear the phrase " Passing the burden of the debt on to our future generations" I am a little unclear what this means. It gets tossed out there so much I know it must be really bad. So, what will our future generations face with "the burden passed onto them"? when they say each American owes "X" amount of dollars each. and for our kids it will be a higher "X" number. so far I think MY defined amount is something like $50,000. well they can't get that much in one lump sum, hell if my taxes went up 100% each year they wouldn't ever get that much out of me because I could not afford to live, I'd quite and go on the dole because working for free is for suckers (slaves basically), and the government doesn't think America would rise up against them for all of us being turned into slave labor?... with 400 million guns in this country? Higher taxes ?(I am assuming this is it but still would like to know more) Higher inflation? (not sure how this relates to national debt) So I have owed a pretty large sum of money because of national debt my whole life, but so far I have made a pretty good life for myself, and my taxes have been relatively low to nothing my whole life. didn't make much for lot of years, you know, working poor type of thing. So when is this burden going to show up, when and how will it show up for future generations? They use such huge numbers its lost its cognitive meaning. |
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China owns your children. If this is true, then I own IBM. There isn't a "layman's explanation" of the economy, unfortunately. There's no question that things are bad, but it is far more complicated than you can squeeze into a soundbite. Protip: Anyone that tries to explain it by comparing the US economy to a household's economy is a motherfucking moron. Watch out for those guys...they're everywhere. |
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China owns your children. what does that mean? China will physically come to america and take my child? force them to work for free in a factory at gun point? Yeah, not happening without a war, a REAL war. so that statement has no context or meaning. try again please. 
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China owns your children. If this is true, then I own IBM. There isn't a "layman's explanation" of the economy, unfortunately. There's not question that things are bad, but it is far more complicated than you can squeeze into a soundbite. Protip: Anyone that tries to explain it by comparing the US economy to a household's economy is a motherfucking moron. Watch out for those guys...they're everywhere. Thumper, I'm not looking for the whole economy to be explained in a sound bite, but what does the Phrase mean " Burden passed on to our children" and "each American owes "X" amount of debt" How will "they" get the debt out of me? if my taxes and everyone else's go substantially higher, the economy would collapse and they would get nothing. America would crumble and the world would follow I believe unless another benevolent country could take its place. if a communist country took its place well..... I know that seems obvious, but the results are equally obvious and the end result would mean the end of America would be a tectonic shift in the world as we know it, basically the dark ages with modern weaponry. hell I don't think even the elites want to live in a post nuclear wasteland, just a few ARFCOMers |
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When the government runs the printing presses at the Treasury Department non stop to help pay off debt or merely even to keep existing programs running, beyond a certain point (and it doesn't take long) this causes inflation.
In a sense, this kind of inflation IS a tax - a "hidden" tax that they can impose without needing legislative approval. How is that, in a sense, a hidden tax? Here's how. The net effect of that is to reduce the real purchasing power of the dollars in your pocket and those of your children. On paper, the take home pay in your paycheck is the same, but the purchasing power of that pay is diminishing, because the money supply is being inflated. They are in essence stealing purchasing power right out of your wallet by doing that. |
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China owns your children. If this is true, then I own IBM. There isn't a "layman's explanation" of the economy, unfortunately. There's not question that things are bad, but it is far more complicated than you can squeeze into a soundbite. Protip: Anyone that tries to explain it by comparing the US economy to a household's economy is a motherfucking moron. Watch out for those guys...they're everywhere. Thumper, I'm not looking for the whole economy to be explained in a sound bite, but what does the Phrase mean " Burden passed on to our children" and "each American owes "X" amount of debt" How will "they" get the debt out of me? if my taxes and everyone else's go substantially higher, the economy would collapse and they would get nothing. America would crumble and the world would follow I believe unless another benevolent country could take its place. if a communist country took its place well..... I know that seems obvious, but the results are equally obvious and the end result would mean the end of America would be a tectonic shift in the world as we know it, basically the dark ages with modern weaponry. hell I don't think even the elites want to live in a post nuclear wasteland, just a few ARFCOMers Your kids are going to get taxed a certain amount. Instead of government goods and services, an increasing amount of what they are taxed will only go to pay interest, and if they are lucky, principle, on money borrowed and spent before they were born. Less roads, smaller military, etc for them, at the same cost - because we have no discipline now. |
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When the government runs the printing presses at the Treasury Department non stop to help pay off debt or merely even to keep existing programs running, beyond a certain point (and it doesn't take long) this causes inflation. In a sense, this kind of inflation IS a tax - a "hidden" tax that they can impose without needing legislative approval. How is that, in a sense, a hidden tax? Here's how. The net effect of that is to reduce the real purchasing power of the dollars in your pocket and those of your children. On paper, the take home pay in your paycheck is the same, but the purchasing power of that pay is diminishing, because the money supply is being inflated. They are in essence stealing purchasing power right out of your wallet by doing that. ok, so lets say everything goes up 20% in cost. if wages don't rise the economy collapses, if wages rise then we get Zimbabwe money, we we try to pay China with just a couple bills with &1,000,000,000,000, on them they will fucking go Ballistic (literally) and again you will have WWIII. you think China will just shrug their shoulders and say, "Good game America, you sure beat us at the big game"? |
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China owns your children. If this is true, then I own IBM. There isn't a "layman's explanation" of the economy, unfortunately. There's not question that things are bad, but it is far more complicated than you can squeeze into a soundbite. Protip: Anyone that tries to explain it by comparing the US economy to a household's economy is a motherfucking moron. Watch out for those guys...they're everywhere. Thumper, I'm not looking for the whole economy to be explained in a sound bite, but what does the Phrase mean " Burden passed on to our children" and "each American owes "X" amount of debt" How will "they" get the debt out of me? if my taxes and everyone else's go substantially higher, the economy would collapse and they would get nothing. America would crumble and the world would follow I believe unless another benevolent country could take its place. if a communist country took its place well..... I know that seems obvious, but the results are equally obvious and the end result would mean the end of America would be a tectonic shift in the world as we know it, basically the dark ages with modern weaponry. hell I don't think even the elites want to live in a post nuclear wasteland, just a few ARFCOMers Your kids are going to get taxed a certain amount. Instead of government goods and services, an increasing amount of what they are taxed will only go to pay interest, and if they are lucky, principle, on money borrowed and spent before they were born. Less roads, smaller military, etc for them, at the same cost - because we have no discipline now. OK, so you now have 50% unemployment because employers won't hire, bad roads so commerce slows to a crawl, no cars...hey it's a giant Cuba, yeah lets think that one to the end...china wants money, not a war. |
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The burden is already here. In 2011 we paid 230 billion dollars in interest on the national debt. That is based on about 10 trillion dollars of debt and historically low interest rates. Next year the interest payments will be based in 16 trillion of debt which would equal 368 billion dollars. Lets say by 2015 the national debt is up to 20 trillion, and (as most of the debt is held in short term bonds) the average interest rate has doubled (which is very possible), our interest payment for the year is now 920 billion dollars. For comparison in 2011 the total US Government revenue was 2,303 billion dollars, so that potential interest payment in 2015 is almost half the Government's income (unless through improving the economy and job creation the Government can start making more money).
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China invested in Treasury Bonds because it's a smart thing to do.
Bet on America. China knows that economies aren't static. This isn't a zero sum game. I'm surrounded by amazing people who surprise me every single day with their ingenuity and production. Fuck the 47%. They can fucking watch. The producers will always find a way. In spite of Zero's bullshit, the economy has found a way to grow. Watch it take off if we get a real leader in the driver's seat. |
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My point is the debt has no end game in reality.
if it were to be attempted to be paid back it would kill America. I know we could grow our way out with the next iPad or oil boom (yeah, that'll happen) so my point is why even talk about the debt, there is no way they will get it out of Americas pocket book, only a robust economy will grow it's way out. and Americans can't grasp that as well as (you owe it") but we will never pay physically from our check book or pay check, it would end the country. |
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When the government runs the printing presses at the Treasury Department non stop to help pay off debt or merely even to keep existing programs running, beyond a certain point (and it doesn't take long) this causes inflation. In a sense, this kind of inflation IS a tax - a "hidden" tax that they can impose without needing legislative approval. How is that, in a sense, a hidden tax? Here's how. The net effect of that is to reduce the real purchasing power of the dollars in your pocket and those of your children. On paper, the take home pay in your paycheck is the same, but the purchasing power of that pay is diminishing, because the money supply is being inflated. They are in essence stealing purchasing power right out of your wallet by doing that. ok, so lets say everything goes up 20% in cost. if wages don't rise the economy collapses, if wages rise then we get Zimbabwe money, we we try to pay China with just a couple bills with &1,000,000,000,000, on them they will fucking go Ballistic (literally) and again you will have WWIII. you think China will just shrug their shoulders and say, "Good game America, you sure beat us at the big game"? At this point, long term, I think we are pretty much fucked. 
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The concern over the national debt is heavily politicized and a lot of it is overreaction, so it's hard to logically assess the situation. People think the US debt is at a point of no recovery, but it's not at all. The US has had a significantly higher debt to GDP ratio in the past and has been able to recover very easily. Noone really knows at what point (in terms of debt to GDP) is "too high" to continue functioning, but we haven't seen it yet and it's certainly higher than what we see right now.
The key is keeping the debt serviceable. Just like a personal loan, who you owe the money to and what the payment terms are makes a big difference. Currently the US debt is easily serviceable and the cost of our debt relative to our GDP is historically about average. A big portion of the US debt is held by US citizens in the form of Treasury Bonds. Our debt to China is not significantly more than our debts to any other major country, so the idea that China is going to "own the US" is just silly. The US also holds debt of several foreign nations, including some of China's debt. It is very likely at some point that the US will engage in debt cancellation with several of these countries. Government debt can be reduced by one of 3 primary ways, and it will take a combination of them to eliminate the US debt. 1. Economic growth leads to a higher GDP and generates more tax revenue to offset government spending. 2. Government spending can be cut to create a budget surplus that reduces the debt. On the opposing side, taxes can be increased to help create a budget surplus. 3. Monetary policy creates inflation which makes our debt cheaper and easier to pay off. Obviously, one tactic alone is not going to solve the US debt crisis. The economy can only grow so fast to keep debt serviceable. We need to reach a point where the US economy grows at roughly the same rate or faster than the US debt. It's difficult to convince the government to make any meaningful spending cuts, and as you mentioned, you can only tax individuals so much before they can't afford to live. Inflation makes the debt cheaper, but it also makes individuals "poorer", as it devalues the currency held by those individuals. So it takes a combination of those factors to reduce the debt by a meaningful amount. This post isn't meant to be defending the US debt. It does need to be addressed soon before it gets too out of line with our economic growth. But the doom and gloomers who think the US is going to collapse because we have a lot of cheap, serviceable debt right now are overreacting. Every time throughout history when the US has a significant debt relative to GDP, people start clamoring that the country is going to collapse and it never does. There are so many factors at play when it comes to the debt that hitting a magic debt number is not going to cause the economy to come crashing down. |
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China invested in Treasury Bonds because it's a smart thing to do. Bet on America. China knows that economies aren't static. This isn't a zero sum game. I'm surrounded by amazing people who surprise me every single day with their ingenuity and production. Fuck the 47%. They can fucking watch. The producers will always find a way. In spite of Zero's bullshit, the economy has found a way to grow. Watch it take off if we get a real leader in the driver's seat. That's the good news, but why are the pundits and government hacks using the phrase each American owes "X"? we may on paper but we'll never physically pay it. |
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In simple terms.....he's borrowing so much money that when our kids grow up the original debts won't be paid off, so they'll have to pick up the tab and their taxes will be paying for stuff that was bought 20 years earlier when their father was still trying to get into their mother's shorts.
And that doesn't take into consideration the $$ trillions that will be borrowed over the next 18-20 years or the money that'll be borrowed after they grow up. This debt is multi-generational. 
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When the government runs the printing presses at the Treasury Department non stop to help pay off debt or merely even to keep existing programs running, beyond a certain point (and it doesn't take long) this causes inflation. In a sense, this kind of inflation IS a tax - a "hidden" tax that they can impose without needing legislative approval. How is that, in a sense, a hidden tax? Here's how. The net effect of that is to reduce the real purchasing power of the dollars in your pocket and those of your children. On paper, the take home pay in your paycheck is the same, but the purchasing power of that pay is diminishing, because the money supply is being inflated. They are in essence stealing purchasing power right out of your wallet by doing that. ok, so lets say everything goes up 20% in cost. if wages don't rise the economy collapses, if wages rise then we get Zimbabwe money, we we try to pay China with just a couple bills with &1,000,000,000,000, on them they will fucking go Ballistic (literally) and again you will have WWIII. you think China will just shrug their shoulders and say, "Good game America, you sure beat us at the big game"? At this point, long term, I think we are pretty much fucked. But that's generational suicide, that's national suicide, the rich and government people will not survive it, and if they do their suffering will be almost as great. so I can't think they want that. |
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In simple terms.....he's borrowing so much money that when our kids grow up the original debts won't be paid off, so they'll have to pick up the tab and their taxes will be paying for stuff that was bought 20 years earlier when their father was still trying to get into their mother's shorts. And that doesn't take into consideration the $$ trillions that will be borrowed over the next 18-20 years or the money that'll be borrowed after they grow up. This debt is multi-generational. so it will never be paid off ever in a million years...so it still has no meaning. |
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I'm sure this has made the rounds, but it puts it into a perspective that anyone can understand: Let’s remove 8 zeros and pretend it’s a household budget: Annual family income: $21,700 Money the family spent: $38,200 New debt on the credit card: $16,500 Outstanding balance on the credit card: $142,710 Now can you see what the problem is? How would you feel if this was a snapshot of your finances? |
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China invested in Treasury Bonds because it's a smart thing to do. Bet on America. China knows that economies aren't static. This isn't a zero sum game. I'm surrounded by amazing people who surprise me every single day with their ingenuity and production. Fuck the 47%. They can fucking watch. The producers will always find a way. In spite of Zero's bullshit, the economy has found a way to grow. Watch it take off if we get a real leader in the driver's seat. That's the good news, but why are the pundits and government hacks using the phrase each American owes "X"? we may on paper but we'll never physically pay it. What you're saying isn't true. Historically the US has paid off higher percentages of GDP. I'n no Keynesian, by the way. I think high levels of public debt are irresponsible. Especially the numbers that Obama has managed to put up. |
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Quoted: Quoted: In simple terms.....he's borrowing so much money that when our kids grow up the original debts won't be paid off, so they'll have to pick up the tab and their taxes will be paying for stuff that was bought 20 years earlier when their father was still trying to get into their mother's shorts. And that doesn't take into consideration the $$ trillions that will be borrowed over the next 18-20 years or the money that'll be borrowed after they grow up. This debt is multi-generational. so it will never be paid off ever in a million years...so it still has no meaning. It will have meaning when the interest on the debt is so high that we cannot afford any discretionary spending (including the military) and then when it climbs higher and we can't afford the "mandatory" spending such as welfare, medicare etc. |
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I'm sure this has made the rounds, but it puts it into a perspective that anyone can understand: Let’s remove 8 zeros and pretend it’s a household budget: Annual family income: $21,700 Money the family spent: $38,200 New debt on the credit card: $16,500 Outstanding balance on the credit card: $142,710 Now can you see what the problem is? How would you feel if this was a snapshot of your finances? That's a very poor comparison. The US debt is much more dynamic than a simple family budget. Is the family paying an interest rate of 2% or 15%? What are their annual debt payments? Is it easily serviceable under their income? Do they have a reasonable expectation of their income growing by 3-4% annually? And how much of that debt is owed to themselves? Did dad loan his daughter $5,000 to buy a car? What are the repayment terms of that loan? How much debt of others do they hold? Etc, etc, etc. |
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I don't know, I think I understand the financial peril America faces. I know it's going to get bad regardless of who wins and stay bad for several years but has a chance to get better with the right guidance. However, when I hear the phrase " Passing the burden of the debt on to our future generations" I am a little unclear what this means. It gets tossed out there so much I know it must be really bad. So, what will our future generations face with "the burden passed onto them"? when they say each American owes "X" amount of dollars each. and for our kids it will be a higher "X" number. so far I think MY defined amount is something like $50,000. well they can't get that much in one lump sum, hell if my taxes went up 100% each year they wouldn't ever get that much out of me because I could not afford to live, I'd quite and go on the dole because working for free is for suckers (slaves basically), and the government doesn't think America would rise up against them for all of us being turned into slave labor?... with 400 million guns in this country? Higher taxes ?(I am assuming this is it but still would like to know more) Higher inflation? (not sure how this relates to national debt) So I have owed a pretty large sum of money because of national debt my whole life, but so far I have made a pretty good life for myself, and my taxes have been relatively low to nothing my whole life. didn't make much for lot of years, you know, working poor type of thing. So when is this burden going to show up, when and how will it show up for future generations? They use such huge numbers its lost its cognitive meaning. I think of it this way: Your parents own a house outright, you live there also. The house is worth $100k (and for this example, it won't go up much). They decide to take vacations, pay for parties, etc. etc...and finance it by Mortgaging and Re-Mortgaging the house. When they finally die, the house you just inherited is mortgaged for $300k. What do you do? Walk away from the place you live? |
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China invested in Treasury Bonds because it's a smart thing to do. Bet on America. China knows that economies aren't static. This isn't a zero sum game. I'm surrounded by amazing people who surprise me every single day with their ingenuity and production. Fuck the 47%. They can fucking watch. The producers will always find a way. In spite of Zero's bullshit, the economy has found a way to grow. Watch it take off if we get a real leader in the driver's seat. That's the good news, but why are the pundits and government hacks using the phrase each American owes "X"? we may on paper but we'll never physically pay it. They can take the debt, which is such a large number that it is difficult for most to grasp, and divide it by the population to get a umber that is much more easily grasped, yet still large enough to make people gasp. They call it multi-generational, because if the government were to stop deficit spending today, incur no new debt ever again, it would take taxpayers (i.e., 53% of income earners) forty or fifty years to pay off the debt by adding an additional $5,000 to their tax bill each year. (WAG based on $50k per person, rough guesstimate of actual taxpayers, and interest rate fudge factored.) |